No value stock

[DK2023]

I have several stocks in my etrade account that have gone to zero $.

If I had sold them at a loss I could take that off my taxes.

At $0.00 they cannot be sold.

Can I still take a loss on them off my taxes?

If so how do I do this?

Thank you

[Denisev1220]

First off, be sure it is deemed worthless. Then, Report the valueless stock in either Part I or Part II of Form 8949, depending on whether it was a short-term or long-term holding. If an asset became worthless during the tax year, it is treated as though it were sold on the last day of the year. In Turbo tax, the date of purchase and date of sale will help Turbo Tax to determine short or long term. Report it as a sale.

[rschule1]

Hi There - If completely worthless, then you can write off stocks as if sold by completing IRS form Schedule D, calculating loss (Cost less Sales Price $0) and deducting a capital loss of up to $3000 per year and carrying over any remainder of loss (if applicable).

[conniem123]

Hi DK2023

I hope you are having a good day!  It's no fun to have worthless stocks, but if those companies have gone bankrupt and the stocks are truly worthless you can report on your tax return for the year they became worthless.  

This normally happens when the corporation files for bankruptcy, stops doing business, and has no assets. Financial difficulties won't make a company's stock worthless unless there's no hope that the company will pull through.

You will enter the information as if you did have a Form 1099-B, in the Investment section. Enter a worthless stock like any stock sale but with a sales price of zero and the word worthless in its description. Enter the correct cost or basis, date acquired, and December 31 as the date sold.  Be sure to select that you did NOT receive a Form 1099-B.

I hope you find this information helpful!

Connie

[AnthonyC_CPA]

Hi DK2023,

  I am sorry to hear that some of the stocks that you purchased are now considered worthless.  You can definitely claim these losses on your personal tax return.  If you are able to sell the stock and the value is $0 your loss would be the amount that you paid for the stock.  If the Company stock is officially deemed worthless and you can not sell it, you can claim a loss on your tax return for the amount that you purchased the stock for.  These losses would be considered capital losses.  If you held the stock for 1 year or less it would be short-term and if you held it for more than 1 year it would be long-term.  You can offset these losses against capital gains of the same type (long-term or short-term) and can deduct net capital losses of $3,000 per tax year.  Any additional capital losses can be carried forward to future years

  Hope this answers your question and thanks for participating in the Ask the Experts Event!

AnthonyC_CPA